The Latest Car Loan Approval Time Statistics Explained
The average car loan approval can take from 24 to 48 hours (1-2 business days).
This statistic refers to the average amount of time it takes for a car loan application to be approved, which typically falls within the range of 24 to 48 hours, equivalent to approximately 1 to 2 business days. This timeframe represents the typical processing time for car loan applications, during which lenders review the applicant’s financial information, credit history, and other relevant factors before making a decision on whether to approve the loan. While some approvals may happen more quickly, this 24 to 48-hour window provides a general expectation for applicants regarding when they can anticipate hearing back about the status of their loan application.
85% of new cars and 54% of used car purchases are financed.
The statistic indicates that a majority of new car purchases, specifically 85%, are financed through some form of lending, such as auto loans or financing arrangements. On the other hand, a smaller proportion of used car purchases, 54%, are financed in a similar manner. This data suggests that consumers are more likely to seek financing options when purchasing a new car compared to a used vehicle. Financing helps individuals afford large purchases by spreading out the cost over time, and the higher percentage of new car financing indicates either a higher price point for new cars or a greater willingness among buyers to take on debt for newer models.
The average credit score to get a new car loan in 2020 was 721.
The statistic “The average credit score to get a new car loan in 2020 was 721” indicates that, when looking at a sample of individuals who obtained new car loans in 2020, the average credit score among them was 721. This suggests that the majority of borrowers likely had credit scores higher than 721, as the average is typically influenced by outliers on both ends of the spectrum. Lenders often use credit scores as a key factor in determining a borrower’s creditworthiness and the terms of the loan, with higher credit scores generally leading to more favorable loan terms, such as lower interest rates. A credit score of 721 falls within the ‘good’ range of credit scores, indicating that borrowers with this average credit score likely had a solid credit history, making them attractive to lenders for new car loans.
The average new car loan is over $32,000 and takes about 69 months to pay off.
The statistic that the average new car loan is over $32,000 and takes about 69 months to pay off indicates a trend in the increasing cost and duration of car financing in the current market. This suggests that consumers are opting for more expensive vehicles and/or longer repayment periods to afford them. The high average loan amount also implies that individuals may be stretching their budgets to purchase a car, which could lead to financial strain in the long run. Furthermore, the extended loan term of around 69 months could result in higher total interest payments over the life of the loan, highlighting the importance of careful financial planning when securing car financing.
The average used car loan is over $20,000 and takes about 65 months to pay off.
The statistic implies that, on average, individuals seeking to purchase a used car are borrowing over $20,000 through a loan. This suggests that consumers are opting for more expensive vehicles and are relying on financing to afford these purchases. Additionally, the fact that the loan term is around 65 months indicates that borrowers are spreading out their payments over a relatively long period, likely to manage the higher loan amounts and make the monthly payments more affordable. This information provides insights into the financial habits and preferences of individuals purchasing used cars, highlighting the trend towards larger loan amounts and longer repayment periods in the used car market.
52% of rejected auto loans were due to the borrower’s debt-to-income ratio.
This statistic indicates that out of all the auto loan applications that were rejected, 52% of them were declined specifically because the borrower’s debt-to-income ratio did not meet the lender’s requirements. The debt-to-income ratio is a measure of an individual’s monthly debt payments relative to their monthly gross income, and it is commonly used by lenders to assess a borrower’s ability to repay a loan. A high debt-to-income ratio suggests that the borrower may be overextended financially and may have difficulty making additional loan payments. Therefore, in this case, a significant portion of rejected auto loan applications were deemed too risky by lenders due to the borrowers having too much existing debt compared to their income.
Only 39% of Americans can cover a $1,000 emergency, impacting ability to pay off a car loan.
The statistic suggests that only 39% of Americans have enough savings to cover a $1,000 emergency, which implies that a majority of the population would struggle to address unexpected financial needs. This lack of emergency savings can have a significant impact on individuals’ financial stability, potentially leading to difficulties in meeting other financial obligations such as paying off a car loan. It highlights a concerning trend of limited financial preparedness among a significant portion of the population, raising important considerations for personal financial planning and the broader economic implications of inadequate savings and financial resilience.
In 2020 Q4, new car loan interest rates were 5.15%, while used car rates were 9.69% on average.
In the fourth quarter of 2020, the average interest rate for new car loans was 5.15%, while the average interest rate for used car loans was 9.69%. These statistics indicate that lenders were offering lower interest rates for financing new car purchases compared to used car purchases during that time period. This difference in interest rates reflects the perceived risk associated with financing a used car, which typically has higher depreciation and potentially a shorter lifespan compared to a new car. Consumers looking to finance a car purchase could use this information to make informed decisions on whether to buy a new or used car based on the associated interest rates and overall borrowing costs.
In 2020, approximately 84.6% of new cars were purchased with financing.
The statistic ‘In 2020, approximately 84.6% of new cars were purchased with financing’ indicates that the majority of new car purchases in 2020 involved obtaining financing for the transaction. This high percentage suggests that a large portion of consumers chose to utilize financing options, such as loans or leases, to afford and acquire new cars. The figure of 84.6% highlights the common practice of spreading out the cost of purchasing a car over time through financing arrangements, which allows individuals to make affordable payments and drive away with a new vehicle without having to pay the entire amount upfront. This statistic showcases the significant role that financing plays in facilitating car ownership for a considerable portion of the population.
The average monthly payment on a new vehicle loan was $563 in 2020.
The statistic “The average monthly payment on a new vehicle loan was $563 in 2020” indicates that, on average, individuals who took out a loan to purchase a new vehicle in 2020 were making monthly payments of $563. This figure provides valuable insight into the financial commitment undertaken by consumers when purchasing a new vehicle, highlighting the typical repayment amount required for such loans during that specific year. Understanding this average payment can help individuals assess their own financial situation and make informed decisions when considering taking out a new vehicle loan.
Nearly one in five auto loan borrowers receive interest rates over 10%.
This statistic indicates that a significant proportion of individuals who borrow auto loans are charged high interest rates exceeding 10%. Specifically, around 20% of auto loan borrowers fall into this category. High interest rates can significantly increase the overall cost of borrowing, resulting in higher monthly payments and potentially leading to financial strain for borrowers. This statistic underscores the importance of shopping around for competitive rates, improving creditworthiness, and negotiating with lenders to secure more favorable terms when seeking an auto loan. Additionally, it may also suggest that there are systemic issues in the lending industry that could be contributing to the prevalence of high-interest auto loans.
As of September 2019, outstanding auto loan debt in the U.S. reached $1.27 trillion.
The statistic ‘As of September 2019, outstanding auto loan debt in the U.S. reached $1.27 trillion’ represents the total amount of money owed by individuals in the United States for their auto loans at that specific point in time. This figure indicates the significant financial burden that auto loans place on households across the country and provides insight into the overall consumer borrowing behavior. The high level of outstanding auto loan debt suggests a reliance on borrowing to finance vehicles, potentially reflecting trends in vehicle prices, interest rates, and economic conditions. Analyzing changes in this statistic over time can help assess the health of the auto loan market and its potential impact on the broader economy.
Almost 23% of auto loan applicants were denied in 2017.
The statistic indicating that almost 23% of auto loan applicants were denied in 2017 suggests that a significant portion of individuals seeking auto loans during that year did not meet the qualifications required by lenders for approval. This denial rate is noteworthy as it can reflect various factors such as borrowers’ credit histories, debt-to-income ratios, employment statuses, and overall economic conditions. Lenders’ decision to deny nearly a quarter of applicants could have significant implications for the auto financing industry and may also indicate potential challenges that individuals face in obtaining loans for purchasing vehicles during that period.
More than 50% of all used car dealership sales in 2020 were financed.
The statistic “More than 50% of all used car dealership sales in 2020 were financed” indicates that the majority of used car purchases at dealerships during the year 2020 involved some form of financing, rather than being paid for outright in cash. This suggests that a significant portion of consumers preferred to spread out the cost of purchasing a used car by utilizing financing options such as car loans. The high percentage of financed sales could be attributed to various factors such as the rising cost of vehicles, favorable interest rates, and the availability of financing options for buyers with different credit backgrounds. This statistic highlights the importance of financing in the automotive industry and indicates a prevalent trend among consumers when purchasing used cars in 2020.
Approximately 44% of consumers apply online for car loans.
The statistic that approximately 44% of consumers apply online for car loans indicates that a significant portion of individuals seeking car financing prefer conducting the application process through digital platforms rather than traditional offline methods. This preference for online applications may be attributed to factors such as convenience, accessibility, and the ability to compare multiple loan offers quickly and easily. The data suggests a growing trend towards digitalization in the financial industry, highlighting the importance for lenders to offer user-friendly online application processes to cater to the needs and preferences of modern consumers.
Over six million Americans are behind on their auto loan payments by 90 days or more.
The statistic “Over six million Americans are behind on their auto loan payments by 90 days or more” indicates a concerning trend in the auto loan industry with a significant number of individuals struggling to keep up with their financial obligations. This situation could have various implications such as potential impacts on credit scores, increased debt burdens, and potential repossession of vehicles. The high number of delinquent loans may reflect broader economic challenges facing many Americans, such as job loss, income instability, or high levels of debt. This statistic underscores the importance of financial literacy, responsible borrowing practices, and consumer protections to prevent individuals from falling into financial distress and to mitigate broader economic risks.
The average credit score to get a used car loan in 2020 was 657.
The statistic that the average credit score required to obtain a used car loan in 2020 was 657 indicates the typical creditworthiness level among individuals who successfully secured such loans that year. A credit score of 657 falls within the fair to good range, suggesting that lenders generally deemed applicants with this score as being relatively low risk in terms of their ability to repay the loan. This average serves as a benchmark for consumers who are considering applying for a used car loan, indicating that having a credit score around or above 657 may improve one’s chances of approval and potentially lead to better loan terms such as lower interest rates.
References
0. – https://www.www.debt.org
1. – https://www.www.havenlife.com
2. – https://www.www.bankrate.com
3. – https://www.www.nerdwallet.com
4. – https://www.www.federalreserve.gov
5. – https://www.www.cnbc.com
6. – https://www.www.experian.com
7. – https://www.www.creditkarma.com
8. – https://www.www.carloan.com
9. – https://www.blog.accenture.com
